court of appeals of indiana · 7(4) and did not begin to run until [lwg’s] work on the 2011...

Court of Appeals of Indiana | Opinion 19A-MI-1762 | April 28, 2020 of 22

ATTORNEYS FOR

APPELLANT/CROSS-APPELLEE

CITY OF MARION

Philip A. Whistler Derek R. Molter

Eric McKeown Ice Miller LLP

Indianapolis, Indiana

Thomas R. Hunt

City of Marion Marion, Indiana

ATTORNEYS FOR

APPELLEE/CROSS-APPELLANT

LONDON WITTE GROUP, LLC

Crystal G. Rowe Kightlinger & Gray, LLP

New Albany, Indiana

Thomas F. Falkenberg

Falkenberg & Ives, LLP Chicago, Illinois

I N T H E

COURT OF APPEALS OF INDIANA

City of Marion,

Appellant-Plaintiff/Cross-Appellee,

v.

London Witte Group, LLC,

Chad Seybold, Estate of

Michael Y. An, Global Investment Consulting, Inc., and

World Enterprise Group, Inc.,

Appellees-Defendants/Cross-Appellants

April 28, 2020

Court of Appeals Case No. 19A-MI-1762

Appeal from the Grant Superior

Court

The Honorable Warren Haas,

Judge

Trial Court Cause No.

27D03-1612-MI-168

Dynamic File Stamp


Baker, Judge.

[1] In 2009, the City of Marion (the City) retained London Witte Group, LLC

(LWG), to provide financial advice regarding the financing of a construction

project. The project went unfinished for years. In 2017, the City filed a

complaint against LWG for negligence, breach of fiduciary duty, and

constructive fraud/unjust enrichment. LWG moved for summary judgment,

and the trial court granted its motion with respect to the first two counts after

finding those claims to be time-barred. The trial court denied the motion with

respect to the third count, finding a longer statute of limitations period applied

to that claim. We affirm the grant of summary judgment in LWG’s favor on

the first two counts and reverse the denial of the motion with respect to the

third count.

Facts

[2] A few years before 2008 or 2009, the YMCA in Marion moved into a new

space, leaving the old YMCA building in downtown Marion vacant. In 2008

or 2009, the City began discussions with Michael An, a developer from

California. An proposed a redevelopment of the old YMCA building into a

combination of hotel, restaurant, retail, and commercial spaces. He estimated

that the project would cost around $5.5 million. The City was willing to

provide bond financing in the amount of $2.5 million, meaning that An had to

come up with $3 million from other sources.


[3] The core of the City’s project team was Mayor Wayne Sebold, Director of

Development Darren Reese, Bruce Donaldson of Barnes and Thornburg, and

Bob Swintz of LWG. Reese was the point person on the project. Donaldson,

who served as bond counsel, reported to Reese. Swintz served as financial

advisor. The bonds would be funded from a tax-increment financing (TIF)

district, with Swintz’s role being to determine “how much room is in the TIF

district to do this project.” Appellant’s App. Vol. II p. 197. Essentially,

Swintz’s primary job was to ensure that the City could pay back the bonds.

[4] First Farmers Bank (the Bank) emerged as the prospective bond buyer. The

Bank and the City each expected that An would provide proof that he had

attained the additional $3 million in financing. In December 2009, shortly

before the bond issue, Swintz told the Bank that he had spoken with Reese and

Mayor Seybold and that the City had “the comfort they need[ed] for the

YMCA project.” Appellant’s App. Vol. III p. 231. Reese and Donaldson were

included on the email and Reese later said that he had no reason to dispute

Swintz’s statement. A few days later, the Bank again questioned whether An

had the full funding in hand in correspondence to Reese and Donaldson,

reminding them that the Bank “need[ed] to insure that there [were] sufficient

funds to complete the project at all times.” Id. at 234. Swintz responded to the

Bank, explaining that “[a]s far as the City is concerned the developer had

provided written documentation about the funding to complete the project.” Id.

at 237. Swintz later testified that he “would not have come up with [his


response] without talking to” Reese, Mayor Seybold, or Donaldson.

Appellant’s App. Vol II. p. 239-40.

[5] Meanwhile, on December 4, 2009, An, through Chad Seybold,1 provided a

memorandum of understanding (the Memo) to Swintz. The Memo was non-

binding and signed by Se Kwon Cho; it stated that Cho would make $3 million

available to An to complete the project. The Memo also indicated that it was

not a final, legally binding agreement, though both An and Cho signed it. Chad

indicated to Swintz that the Memo was the proof requested by the City and the

Bank that An had the $3 million in financing on hand. Years later, at the time

of the litigation at issue herein, neither Mayor Seybold nor Reese recalled

knowing about the Memo. The City claims that Swintz intentionally withheld

the Memo from the Bank and the City.

[6] Evidently, Swintz’s assurances satisfied the Bank, because the bonds were

issued on December 16, 2009. At some point, construction began, but it was

never completed. The City refinanced the bonds in 2011, after which An

continued to work on the project and to look for investors.

[7] In December 2013, four years after the bond issue, the Marion Chronicle-Tribune

published several critical articles about the project and submitted several

information requests. In response, the City hired KPMG to perform a forensic

audit of the project; KMPG found no improprieties, though Chad failed to

1 Chad is Mayor Seybold’s brother.


comply with KPMG’s document requests. The State Board of Accounts

(SBOA) also reviewed the project and found, in the spring of 2014, that it was

nearly completed.

[8] In December 2015, An died. The project remained unfinished. The City filed a

complaint against An’s estate on December 8, 2016. The City entered into a

tolling agreement with LWG on February 13, 2017, which tolled the statute of

limitations through September 30, 2017. On September 29, 2017, the City filed

an amended complaint, adding Chad and LWG as defendants. The primary

allegation from which the City’s claims against LWG stems is that LWG “not

only failed to tell the City that An lacked the money to complete the project, it

prevented the Bank from learning it—a fact which would have stopped, or at

least substantially changed, the bond issue.” Appellant’s Br. p. 8. The specific

claims remaining against LWG are for negligence, breach of fiduciary duty, and

constructive fraud/unjust enrichment.

[9] During the discovery process, the City allegedly first became aware of the

Memo. Additionally, discovery has revealed that bond proceeds were used to

provide personal benefits to Mayor Seybold, including payment of the premium

on a life insurance policy, cash payments to Mayor Seybold’s wife, and

contributions to Mayor Seybold’s political campaigns. Moreover, An was

allegedly told that the City would invest in his project only if he hired the

Mayor’s brother, Chad.


[10] On May 17, 2019, LWG filed a motion for summary judgment on each of the

three claims against it. LWG’s motion focused on the statute of limitations for

each claim, arguing that the complaint was filed outside the limitations period.

During the oral argument on the summary judgment motion, counsel for the

City conceded that “in [the spring of] 2014, the City . . . certainly had some

concerns about the misapplication of bond proceeds.” Tr. Vol. II p. 36.

[11] On July 8, 2019, the trial court entered an order granting LWG’s motion with

respect to the claims for negligence and breach of fiduciary duty and denying it

with respect to the claim for constructive fraud/unjust enrichment. In pertinent

part, the trial court found as follows:

[The negligence and breach of fiduciary duty] Counts are based

on the two-year statute of limitations contained in Ind.

Code § 34-11-2-4(a). The two-year period had expired long

before February 16, 2017 when [LWG] signed a tolling

agreement with the City.

[LWG’s] work for the City as it relates to this case was divided

into two parts:

• The December 1, 2009 Series 2009 Bonds for a principal amount

of $2,500,000; and

• The February 15, 2011 Refinancing of the 2009 Bonds and

consolidation of obligations from other City projects.

[LWG’s] work on the 2009 Bonds and its work on the 2011

Refinancing are intertwined. At the latest the City became aware

that bond funds may have been misappropriated in the Spring of

2014. As a result the City’s Corporate Counsel employed a

forensic accounting firm to investigate and the City requested an


investigation by the State Board of Accounts. The Court

determines that at the latest the statute of limitations . . . began to

run as of the Spring of 2014.

The Court finds that the City may not rely upon the continuous

representation nor the adverse domination nor fraudulent

concealment . . . to extend the begin date for the two-year statute

of limitations . . . .

***

The Court denies the relief requested in the SJ Motion as to [the

constructive fraud/unjust enrichment claim. That claim] is based

on the six-year statute of limitations contained in I.C. § 34-11-2-

7(4) and did not begin to run until [LWG’s] work on the 2011

Refinancing was completed.

Appealed Order p. 1-2. The trial court deemed the grant of summary judgment

on the first two counts to be a final and appealable judgment; it later certified

the denial of summary judgment on the third count for interlocutory appeal.

The City now appeals and LWG cross-appeals.

Discussion and Decision

[12] The City argues that the trial court erred in granting summary judgment in

LWG’s favor on the negligence and breach of fiduciary duty claims. LWG

cross-appeals, arguing that the trial court erred in denying summary judgment

on the claim for constructive fraud/unjust enrichment.

[13] Our standard of review on summary judgment is well established:


We review summary judgment de novo, applying the same

standard as the trial court: “Drawing all reasonable inferences in

favor of . . . the non-moving parties, summary judgment is

appropriate ‘if the designated evidentiary matter shows that there

is no genuine issue as to any material fact and that the moving

party is entitled to judgment as a matter of law.’” Williams v.

Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A

fact is ‘material’ if its resolution would affect the outcome of the

case, and an issue is ‘genuine’ if a trier of fact is required to

resolve the parties’ differing accounts of the truth, or if the

undisputed material facts support conflicting reasonable

inferences.” Id. (internal citations omitted).

Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014).

[14] All the arguments on appeal and cross-appeal turn on statutes of limitations.

Statutes of limitations are “practical and pragmatic devices to spare the courts

from litigation of stale claims, and the citizen from being put to his defense after

memories have faded, witnesses have died or disappeared, and evidence has

been lost.” V. Ganz Builders & Dev. Co. v. Pioneer Lumber, Inc., 59 N.E.3d 1025,

1032 (Ind. Ct. App. 2016) (internal quotation omitted). A statute of limitations

defense is particularly well suited for determination by summary judgment. Id.

I. Appeal

[15] It is undisputed that a two-year statute of limitations governs the City’s claims

against LWG for negligence and breach of fiduciary duty. Ind. Code § 34-11-2-

4. Because the City entered into a Tolling Agreement with LWG on February

13, 2017, and filed its complaint against LWG within the tolling period, LWG

is required to show that the statute of limitations for these claims began to run


before February 13, 2015, to be entitled to summary judgment. In other words,

as the movant, LWG had the burden of establishing as a matter of law that

(1) before February 13, 2015, (2) the City knew or should have known that it

had been damaged (3) as a result of misconduct.

[16] The City argues that there are four reasons that the claims did not begin to run

before February 13, 2015: the discovery rule does not apply; the continuous

representation doctrine tolled the limitations period; LWG’s fraudulent

concealment should prevent the limitations period from barring the claims; and

the adverse domination doctrine prevented the limitations period from

accruing.

A. Discovery Rule

[17] Under the discovery rule, the statute of limitations does not begin to run until

the plaintiff actually knows, or in the exercise of ordinary diligence could have

discovered, that it has sustained an injury from tortious conduct. Wehling v.

Citizens Nat’l Bank, 586 N.E.2d 840, 843 (Ind. 1992). The discovery rule “does

not mandate that plaintiffs know with precision the legal injury that has been

suffered, but merely anticipates that a plaintiff be possessed of sufficient

information to cause him to inquire further in order to determine whether a

legal wrong has occurred.” Perryman v. Motorist Mut. Ins. Co., 846 N.E.2d 683,

689 (Ind. Ct. App. 2006).

[18] Here, the City’s claims focus on An’s lack of financing at the time the bonds

were issued. Because the bonds would not cover the full cost of the project, the


City and the Bank required that An would have sufficient financing on hand to

cover the rest. According to the City, LWG “not only failed to tell the City that

An lacked the money to complete the project, it prevented the Bank from

learning it[.]” Appellant’s Br. p. 8. In other words, the actual injury occurred

(if at all) at the time of the bond issue—in December 2009.2

[19] By pointing to the date of the alleged wrongdoing, LWG met its prima facie

burden as movant to show that the lawsuit was filed outside the two-year

statute of limitations. The burden then shifted to the City. See McDaniel v.

Erdel, 91 N.E.3d 617, 624 (Ind. Ct. App. 2017) (“Because the evidence shows

that the action was commenced more than two years after the date of the

alleged [wrongdoing], the burden shifts to the [non-movant] to establish an

issue of fact material to a theory that avoids the defense.”), trans. denied. But

here, the City submitted no evidence—not even a self-serving affidavit—to show

when or how the City was possessed of sufficient information to cause it to

inquire further. The City claimed that it had “designated evidence supporting

an inference that its claims did not accrue until sometime after December 31,

2015,” but we are unable to discern what that evidence might be. Appellant’s

App. Vol. VII p. 59.

[20] The trial court zeroed in on the lack of evidence supporting the City’s position

regarding when it discovered the wrongdoing. At the summary judgment

2 Although the City originally alleged additional injuries stemming from the 2011 refinancing, it has since

abandoned that position.


argument, the trial court pushed the City to answer when it had “discovered”

the claims against LWG. Tr. Vol. II p. 36. Counsel responded that “in 2014,

the City . . . certainly had some concerns about the misapplication of bond

proceeds.” Id.

[21] Generally, we prefer not to rely solely on a concession made by an attorney

during oral argument. And here, while we take that into consideration, it need

not be the sole focus of our analysis. We find five key undisputed facts to be

dispositive. See Perryman, 846 N.E.2d at 689 (holding that the law “does not

require a smoking gun in order for the statute of limitations to commence”).

[22] First, the YMCA project remained unfinished more than four years after the

2009 bond issue. By 2013, the local newspaper began printing a series of

articles criticizing the project and questioning its status. The fact that the

project was still unfinished years later and was attracting negative public

attention should have given the City reason to investigate whether An did, in

fact, have sufficient financing to complete the project.

[23] Second, the unfinished project and negative public attention did, in fact, give

the City reason to investigate. Specifically, the City retained KPMG to perform

a “forensic audit specific to the YMCA project, to determine if the

disbursements had been made . . . properly and if all the funds were accounted


for.” Appellant’s App. Vol. III p. 218.3 The City also allowed representatives

from the SBOA to tour and evaluate the unfinished building. The actual

commencement of an investigation clearly shows that the City had reason to

investigate.

[24] Third, KPMG’s investigation revealed that the Bank’s trustee “had not

obtained” the “documentation for the various distributions related to the

YMCA project.” Id. at 217. Additionally, in the course of KPMG’s audit,

Chad failed to comply with the firm’s documentation requests. The trial court

recognized the significance of this fact:

And . . . you have your forensic accounting from—because you

have—and there’s smoke. You’re concerned. You, you want to

do some investigation and the forensic accounting group comes

back and says, “He[4] won’t give us the information.” Isn’t that

more smoke? I mean, wouldn’t you be on notice at that point?

Tr. Vol. II p. 60.

[25] Fourth, as of May 2013—nearly four and one-half years after the bond issue—

An was actively seeking additional investments for the completion of the

3 The City argues that generally, the duty of an auditor does not extend to discovering fraud. That is beside

the point in this case, however, as KPMG was hired to conduct a forensic audit.

4 “He” referred to the mayor’s brother, Chad, who was the project manager and did not comply with

KPMG’s document requests.


project. An’s continued fundraising triggered a duty to inquire further as to

whether his initial financing was falsified.

[26] Fifth, by 2014, An had not spent even close to $5.5 million on the project. The

estimates in the record vary from $2 million to over $3 million. The bonds were

issued on the understanding that An had another $3 million in hand. The fact

that, four years later, he had not spent close to the total amount, and the project

remained unfinished, should have caused the City to question the validity of the

financing information accompanying the original 2009 bond issue.

[27] All this evidence together clearly shows that, long before February 2015, the

City had sufficient information to cause it to inquire further to determine

whether a legal wrong had occurred. The City’s arguments to the contrary do

not change this conclusion.

[28] The City first contends that it did not suffer an injury until An died in

December 2015. This position, however, is inconsistent with the City’s claims,

which are premised on an allegation that the City was injured at the time of the

original 2009 bond issue because it was allegedly completed based on false

financing information.

[29] Next, the City argues that the statute of limitations did not begin to accrue

because it did not uncover any wrongdoing by LWG. It relies both on Mayor

Seybold’s statements that he believed that LWG had done a great job and

expected that the project would be a success and the fact that the KPMG audit

did not uncover actual wrongdoing. This argument is unavailing for two


reasons. First, we apply an objective, rather than a subjective, standard to the

discovery rule, asking when the plaintiff knew or should have known to inquire

further. Second, the City’s argument would mean that meritless claims could

never be time-barred, because the lack of merit would prevent the inexistent

wrongdoing from being discovered. The statute of limitations begins to accrue

when the plaintiff has enough information to begin the inquiry process, not

when, in the course of that process, actual wrongdoing is discovered.

[30] Finally, the City argues that LWG has not met its burden as the movant

because it has not established that before February 2015, the City was aware

that its damages were attributable to LWG. Initially, we note again that the

City’s alleged damages stem from the 2009 bond issue. And in the context of

that process, the City viewed LWG as a fiduciary that was responsible for

disclosing information about An’s financial status. Consequently, the City was

on notice to investigate claims against LWG once it was on notice that the

bonds may have been issued based on incorrect financing information.

[31] Moreover, this Court has found claims to be time-barred where the victim was

aware of an injury but unaware of the identity of the tortfeasor until after the

limitations period had ended. See Dotson v. Stryker Corp., 108 N.E.3d 376, 384 &

n.10 (Ind. Ct. App. 2018) (statute of limitations began to run when plaintiff

“knew that [defendants] were in her operating room, though she did not know

who they were”); Rieth-Riley Constr. Co. v. Gibson, 923 N.E.2d 472, 476-77 (Ind.

Ct. App. 2010) (declining to “extend the discovery rule to apply to cases like

this one where the indeterminate fact is not the existence of an injury, but rather


the identity of a tortfeasor”); Richards-Wilcox, Inc. v. Cummins, 700 N.E.2d 496,

498 (Ind. Ct. App. 1998) (holding that the fact that the plaintiff “did not

determine until over two years later the actual identity of the party causing the

injury did not suspend the running of the statute of limitations”).

Consequently, while the record shows that the City should have been aware of

its potential claims against LWG before February 2015, even if that were not

the case, the limitations period would not have been tolled.

[32] In sum, the undisputed evidence in the record shows that the City had enough

information long before February 2015 to have caused it to inquire further

regarding possible wrongdoing. And, in fact, it did inquire further by instituting

investigations from KPMG and the State Board of Accounts. Therefore, we

find that the discovery rule bars these two claims against LWG.

B. Continuous Representation

[33] Next, the City argues that the continuous representation doctrine prevents its

claims from being time-barred. This doctrine tolls the statute of limitations

when a professional advisor, such as an attorney,5 commits an error during the

course of a professional engagement. Biomet, Inc. v. Barnes & Thornburg, 791

N.E.2d 760, 765 (Ind. Ct. App. 2003). Under those circumstances, the statute

does not begin to run until the professional relationship relating to the matter at

5 This Court has expressly refused to extend this doctrine to financial advisors. Landmark Legacy, LP v.

Runkle, 81 N.E.3d 1107, 1118-19 (Ind. Ct. App. 2017).


issue has been terminated. Id. The purpose of the doctrine is to allow

professionals to try to mitigate the effects of their errors, potentially avoiding

litigation altogether. A collateral benefit is that the professional relationship is

preserved while the professional attempts to mitigate the effects of its error. Id.

at 765-66.

[34] The City neglects to address the fact that this doctrine applies only if the

defendant continued to represent the plaintiff in the “specific matter” in which

the alleged misconduct occurred. Bambi’s Roofing, Inc. v. Moriarty, 859 N.E.2d

347, 358 (Ind. Ct. App. 2006). We agree with LWG that the specific matter in

which the alleged misconduct occurred was not the YMCA project as a whole;

it was the original bond issue, which was concluded in 2009. Specifically,

Mayor Seybold and Swintz agreed that LWG’s role was to determine “how

much room is in the TIF district to do this project” and ensure that the City

could “pay back the bonds.” Appellant’s App. Vol. II p. 197, 227. That is a

specific role in connection with a particular bond issue rather than the role of a

project developer. Every witness who addressed the issue understood that

LWG’s responsibilities concluded when the bond issue closed. Id. at 202-03

(Mayor Seybold); id. at 224 (Swintz); Appellant’s App. Vol. III p. 95

(Donaldson). No witness disputed this or suggested any ambiguity. Moreover,

LWG was paid out of the bond proceeds, meaning that its compensation

structure also confirms that the 2009 bond issue was a discrete engagement.

Under these circumstances, we find that the continuous representation doctrine

does not apply to toll the statute of limitations period.


C. Fraudulent Concealment

[35] Next, the City argues that LWG fraudulently concealed its alleged misconduct.

Specifically, the City argues that LWG fraudulently concealed the Memo and,

as a result, the statute of limitations period should be tolled.

[36] The fraudulent concealment doctrine “operates to estop a defendant from

asserting the statute of limitations as a bar to a claim whenever the defendant,

by his own actions, prevents the plaintiff from obtaining the knowledge

necessary to pursue a claim.” Doe v. Shults-Lewis Child & Family Servs., 718

N.E.2d 738, 744 (Ind. 1999). And where the parties are in a fiduciary

relationship, the concealment need not be active, and a mere failure to disclose

information for which there is a duty to disclose gives rise to fraudulent

concealment. Farmers Elevator Co. of Oakland, Inc. v. Hamilton, 926 N.E.2d 68,

79-80 (Ind. Ct. App. 2010).

[37] However, when “the plaintiff obtains information that would lead to the

discovery of the cause of action through ordinary diligence, the statute of

limitations begins to run, regardless of any fraudulent concealment perpetrated

by the defendant.” Snyder v. Town of Yorktown, 20 N.E.3d 545, 551 (Ind. Ct.

App. 2014) (internal quotation omitted). Here, as noted above, the City knew

or should have known well before February 2015—even without the Memo—

that it needed to inquire further as to possible damages caused by a tortfeasor.

Therefore, even with the alleged fraudulent concealment, the City was on


notice of the situation in 2014 at the very latest. Under these circumstances, the

doctrine of fraudulent concealment does not toll the limitations period.

D. Adverse Domination

[38] Finally, the City argues that the adverse domination doctrine tolled the statute

of limitations until at least the end of Mayor Seybold’s administration on

December 31, 2015. This doctrine is based on the principle that a corporate

entity “can only ‘discover’ an injury to itself, and act to redress that injury, to

the extent that those individuals who control it know of the injury and are

willing to act on that knowledge.” Resolution Trust Corp. v. O’Bear, Overholser,

Smith & Huffer, 840 F. Supp. 1270, 1284 (N.D. Ind. 1993). In other words,

where an entity is dominated “by those whose own malfeasance might be

revealed in the course of litigating a complaint, it follows the entity has not

‘discovered’ the injury to its interests in any meaningful way.” Id. This

doctrine has never been applied in Indiana by an Indiana appellate court.

[39] In invoking this doctrine, the City argues that Mayor Seybold controlled the

City, that he committed malfeasance, and that the City could not have

discovered its injuries in any meaningful way. The City notes the following

evidence in the record:

• On May 25, 2011, Mayor Seybold signed an application for a $1 million

life insurance policy, naming himself as the insured, his wife and children

as beneficiaries, and An as the payor. An used bond proceeds to pay at

least one premium on that life insurance policy.

• An’s companies used bond proceeds to make campaign contributions to

Mayor Seybold and cash payments to the mayor’s wife.


• An hosted a political fundraiser for Mayor Seybold in California in 2011.

• Mayor Seybold had a conflict of interest because An employed the

mayor’s brother, Chad, as the manager on the YMCA project. Indeed, it

appears that the mayor conditioned the provision of bond funds to An on

An’s agreement to hire Chad.

• Chad did not comply with KPMG’s document requests during the

forensic audit and the mayor did not ask him to.

• Mayor Seybold may have been unwilling to pursue legal action against

LWG because the company was a significant financial contributor to the

mayor’s campaigns and Swintz was a close political advisor.

The City argues that this evidence creates a genuine issue of material fact “as to

whether Mayor Seybold could have been expected to redress the City’s interests

by filing suit over the project during his administration.” Appellant’s Br. p. 56-

57.

[40] The primary problem with the City’s argument is that it does not, and cannot,

show that Mayor Seybold “dominated” the City. Several individuals could

have discovered and pursued claims against LWG, including the two different

Directors of Development, the City Attorney, and at least one member of the

City Council. Nothing in the record shows that Mayor Seybold could have

prevented these individuals from redressing the City’s interests. It is the head of

the City’s law department, rather than the mayor, who commences proceedings

needed to protect the City’s interests. Ind. Code § 36-4-9-12. It is simply not

credible, based either on this record or common knowledge of the way

municipalities operate, to conclude that Mayor Seybold dominated the City in

any form or fashion. Consequently, this argument is unavailing.


[41] In sum, the discovery rule applies because long before February 2015, the City

had sufficient information that it knew or should have known that it needed to

conduct further inquiry to determine if it had been damaged as a result of

tortious conduct. And none of the exceptions to the discovery rule, including

the doctrines of continuous representation, fraudulent concealment, and

adverse domination, toll the limitations period in this case. Therefore, the trial

court did not err by granting summary judgment in favor of LWG on the City’s

two claims that have a two-year statute of limitations.

II. Cross-Appeal

[42] The trial court found that the City’s claim for constructive fraud/unjust

enrichment is governed by a six-year statute of limitations, meaning that the

claim was not time-barred and survived summary judgment. LWG argues that

this conclusion was erroneous.

[43] We ascertain the applicable statute of limitations “by identifying the nature or

substance of the cause of action and not of the form of the pleadings.”

Whitehouse v. Quinn, 477 N.E.2d 270, 273 (Ind. 1985). Generally, fraud claims

are governed by a six-year statute of limitations. I.C. § 34-11-2-7. But a two-

year statute of limitations may apply to constructive fraud claims if the

substance of the claims warrants it. For example, in one case, the plaintiff filed

a legal malpractice claim against his former attorney. Keystone Distrib. Park v.

Kennerk, Dumas, Burke, Backs, Long & Salin, 461 N.E.2d 749 (Ind. Ct. App.

1984). The plaintiff also alleged constructive fraud, but after inspecting the


substance of the claims, this Court found that the alleged constructive fraud was

“merely one example of the asserted attorney malpractice . . . .” Id. at 752.

This Court had disallowed the attorney malpractice claim as being barred by

the two-year statute of limitations and was compelled to do the same to the

constructive fraud count because it was “of the same ilk.” Id. This Court has

reached similar conclusions in at least two other cases. See Myers v. Maxson, 51

N.E.3d 1267, 1277 n.10 (Ind. Ct. App. 2016) (applying a two-year limitations

period to all claims because the allegations of constructive fraud were

“substantively part of his legal malpractice claim”); Small v. Centocor, Inc., 731

N.E.2d 22, 29 (Ind. Ct. App. 2000) (applying a two-year limitations period to

all claims, including fraud and constructive fraud, because “at the root of all the

claims” was the medical care given to the plaintiff’s father).

[44] In this case, the constructive fraud/unjust enrichment count is comprised of just

six paragraphs. One incorporates the prior allegations and three more deal with

damages. As the basis of the claim, the City alleges that LWG breached

fiduciary duties, “amounting to constructive fraud,” and those breaches

included, among other things, failing to disclose material facts to the City—as

set forth in the preceding paragraphs on the other claims. Appellant’s App.

Vol. III p. 41-42. The City has never explained how a trial on the constructive

fraud claim would differ at all from a trial on the other two counts. If the City

were permitted to extend the statute of limitations merely by asserting a claim

for constructive fraud, it would make “all actions for” breach of fiduciary duty


“governed by the longer statute of limitations merely by reason of the fact that

some” constructive fraud “could be alleged.” Whitehouse, 477 N.E.2d at 274.

[45] The City rests its argument on the fact that constructive fraud has legal elements

that are different from the elements of breach of fiduciary duty or negligence.

Obviously, that is and has always been the case, but this Court has found

repeatedly that, depending on the nature of the facts and allegations, a

constructive fraud claim may be so substantively similar to the other claims at

issue that it is nonetheless governed by the shorter limitations period.

[46] Consequently, we agree with LWG that the two-year statute of limitations

should govern the constructive fraud/unjust enrichment claim in this case. And

for all the reasons already expressed herein, this claim is time-barred.

Accordingly, we reverse the trial court’s denial of LWG’s summary judgment

motion on the constructive fraud claim and remand with instructions to enter

summary judgment in LWG’s favor.

[47] The judgment of the trial court is affirmed in part, reversed in part, and

remanded with instructions to enter summary judgment in LWG’s favor on the

City’s claim for constructive fraud/unjust enrichment.

Bradford, C.J., and Pyle, J., concur.

court of appeals of indiana · 7(4) and did not begin to run until [lwg’s] work on the 2011...

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